2025's Takeoffs & Touchdowns for Airline Stocks, Outlook for 2026

Core Insights - The airline industry is experiencing a significant increase in demand, with the FAA predicting the busiest Thanksgiving travel period in 15 years and expectations for a strong Christmas season [1][2][3] - Airlines are reporting healthy demand trends, with stable fares and modest growth anticipated as they finish Q4 and head into 2026 [3][4][6] - The focus on premium offerings is expected to continue, as airlines invest in enhancing these services to improve margins amid inflationary pressures [9][12][13] Industry Performance - The Jets ETF is near three-year highs, reflecting a nearly 60% increase from its April low, indicating strong market performance for airlines [1] - Despite some earnings impairment due to government shutdowns, the overall market remains healthy, with passengers eager to travel [4][7] - Airlines have shown resilience throughout the year, managing to maintain stable fare environments despite capacity adjustments and market disruptions [11][12] Future Outlook - Growth in premium services is expected to persist, with airlines focusing on this segment as a key area for margin improvement [9][10] - While there are concerns about consumer spending and macroeconomic conditions, several factors are still supporting growth expectations for the airline industry into next year [13] - The current pricing environment suggests that fares have not increased significantly over the past couple of years, even on an inflation-adjusted basis, which may contribute to ongoing demand [12][13]